TJX consumer settlement sale offer draws scorn

TJX consumer settlement sale offer draws scorn
TJX consumer settlement sale offer draws scorn

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By John Leyden
20th November 2007

Law enforcement officials have poured cold water on plans by TJX to hold 
a one-day sale for customers as part of a proposed settlement for a 
consumer class-action case against the security incident-afflicted 

TJX faces consumer and bank class action lawsuits over the exposure of 
an estimated 45.7m customer records as the result of a security breach 
that lasted for two distinct six month periods between 2003 and December 
2006. Hackers broke into a system that stored data on credit card, debit 
card, cheque, and return details in an attack blamed on a poorly secured 
wireless network in one of its stores. Subsequent credit card frauds 
have being traced to data swiped as a result of these breaches and a 
number of arrests have been made.

Proposals for a one day sale are among the measures suggested to settle 
to the consumer class-action lawsuit against TJX. It's unclear if the 
sale would be restricted to "victims" of the attack or how it would 
differ from an ordinary clearance sale. TJX itself might conceivably 
profit from the measure, but the only folks sure to be quids-in are 
lawyers working on the settlement. By increasing the nominal value of 
the settlement, the sale would result in an increase to the fees of 
lawyers working for plaintiffs in the case.

Massachusetts Attorney General Martha Coakley, who is heading a 
multi-state team of state law officials in a probe against TJX, has 
criticised the sale proposal in a letter to federal judges overseeing 
twin-track class-action lawsuits.

"We are unaware of precedent in which a special event, or any type of 
sale open to the general public, has been deemed a benefit of a 
class-action settlement and this court should avoid that precedent. We 
believe this aspect of the proposed settlement demeans the class-action 
process, which can be used as a meaningful tool to protect consumers," 
Coakley wrote to US District Court Judge William G. Young, eWeek 

Holding a sale as a good will gesture is fine and dandy. But giving it a 
legal status is of dubious benefits to consumers, Coakley argues.

Although terms for consumer class-action lawsuit still carry the strong 
whiff of joss sticks and the distant sound of whale song, proposals to 
settle a class action lawsuit between the off-price retailer and banks 
are more advanced. Judge Young has ordered parties in that dispute to go 
into mediation, a move that reportedly implies that banks and TJX are 
close to agreeing a settlement. =C2=AE

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